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Archive for the ‘Mobile’ Category

The More Things Change…

Friday, February 17th, 2012

We’re going to talk about what’s coming – about the future. But to do so, we first have to go back to the past – 30 years back, to be exact. In 1981 Adam Osborne had just unveiled his Osborne 1 computer, the first portable (or laptop) to hit the small but growing PC market. The Osborne computer was indeed portable, but just barely so. Even a strong young man had trouble carrying one more than a few blocks. But this early computer made history in another way.

Back then, the general assumption was that anybody who wanted to use a personal computer would have to know how to program. Osborne aggressively challenged that premise, and predicted that in the future less than one in ten PC users would be programmers. His statement caused furious debate at the time, but these days it’s just limpid fact. Most people happily surf the Web, check their e-mail, compose text, construct spreadsheets, play games, and do a thousand other things – all without writing a single line of code themselves.

Cycle forward to today … and tomorrow. Both Apple and Microsoft have announced big changes to their next operating system releases. The announced changes will make both feel more like tablets than desktops. Both will offer access to apps, those nifty micro-programs that are so much fun to use, so easy to get, and so cheap that nobody minds dumping those no longer useful or used.

Here’s a prediction: by 2016, most computers available to consumers are going to look and act just like today’s iPhones and iPads. That is, they will be able to communicate like cell phones, they will all have built-in GPS, and they will feature cameras and touch-screen interfaces. Most importantly, they will depend on apps instead of expensive, pre-loaded software for the functionality users will want. In fact, what we now call computers will have largely faded from the scene – except for some business and gaming applications. Personal computers will be replaced by mobile devices of one sort or another.

I don’t expect the kind of pushback Adam Osborne got for his prediction. For one thing, what I’ve described is already beginning to take place. Tablets and smart phones are replacing desktop computers and laptops in many homes and businesses. The app business is thriving, with hundreds added to “app store” inventories every month. All indicators point to a post-computer future. Your children’s kids will wonder what a computer desk was for.

The cloud will grow in importance to this new digital world, and that’s another replay of history. Back in the ‘60’s and ‘70’s, we used to call it time-sharing, and it allowed us to search enormous databases without taxing the capabilities of our small computers and dumb terminals. We relied instead on renting computing power from the water-cooled giants of IBM and other industrial firms. Ever wonder why some of the older business parks have big, glassy areas in the fronts of many buildings? They were put there when those buildings were constructed, to show off the resident firm’s computer. It typically filled the room and was a point of great corporate pride. The techs who worked in these glass-fronted rooms often wore white lab coats and gloves.

All that said, some things won’t change – at least not much. The Web will still function much as it does now, as time goes by perhaps more as a foundation for social sites than as an entity of its own. There will probably still be websites for some time to come, although some businesses already question the need for them, choosing to go straight to social sites instead.

The world will change a lot during the next five years, at a faster pace than it ever has before. How much more change will there be by 2020? The short answer: a great deal. We’ll report it to you as soon as it becomes clear to us. After all, at Borrell that’s our job.

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YAM’s Bigger Bomb

Wednesday, November 9th, 2011

Yahoo, Microsoft and AOL (let’s call them YAM) plan to share unsold premium display ads to “appeal directly to Madison Avenue’s desire for scalable reach – something that has been increasingly hard to come by via TV, but not yet achievable online,” according to an article in Media Post.

The story reminded me of the effort during World War II to build bigger and bigger bombs. At the start of that war, 500-pound bombs were the standard. As conflict continued, 2-ton, 5-ton, and even 10-ton bombs were developed.  But as it turned out, the secret to ending the fighting did not reside in a heavier bomb, but in a single atom.

The YAM deal will undoubtedly yield some results – just as bigger bombs made bigger holes during World War II.  But it doesn’t hold much long-term promise, in my opinion.  The big Madison Avenue agencies persist in trying to reshape the Web into another mass media choice. They talk about scalable reach and CPMs – vestiges of the days when reach was measured by audiences, large groups, markets and households.  The world of concentrated media is changing to one of fragmented, personal media.  If Moammar Gadhafi were still alive, you could ask him.

The Web doesn’t easily fit any of these parameters.  It is, and always has been, a personal medium, more like a letter than a magazine. As users move their online reception from static computers to portable tablets and smart phones, the personal nature of the Web becomes more prominent while the mass communications side of it continues to wither.

Thirty years ago, when PCs were first gaining a foothold among consumers, a debate raged over whether people who couldn’t program computer code would ever use them. That debate has long since been settled. The debate now is whether people who don’t use spreadsheets and word processors – the bulwark of the static desktop – will use computers. I submit that the immediate and growing demand for tablets has settled that argument as well.

Most of what we use computers for can easily be done with smart phone or iPad apps, which are also more fun to use. They’re cheap, they have no learning curve to speak of, and when we are done with them they can be erased without qualm. Sure, there are work-related apps we can download as well, including some that can link us to desktops for “serious” computing. Some of us will continue to want and need these. Most of us will not.

Chart Copyright 2011 Borrell Associates, Inc

The chart shows where local online ad spending is most likely to migrate as these trends persist and grow.  It’s not that advertisers will stop sending ads to stationary computers. It’s just that most ads will be received by mobile devices.

Advertising to mobile device users follows different rules than the ones set up for the mass media we have all learned to use. In fact, it won’t be advertising any more – at least not entirely. It will be a mixture of advertising and promotions that appeals to individuals, not mass audiences.

Some marketing innovators will learn the new rules and thrive in this new media world. Some, like the Madison Avenue agencies of today, will try to bend the world back to a mass audience model.  The chart offers a clue as to how well this might work.

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5 Things To Do in Mobile

Friday, October 7th, 2011

Our 2011 Local Mobile Advertising Conference in Chicago Oct. 2-4 was packed with statistics on mobile usage both by consumers and advertisers, as well as real-world examples from more than two dozen media companies in the newspaper, yellow pages, TV, radio and Internet pure-play space.

It was easy to be overwhelmed with ideas and opportunities. So Borrell Associates President Colby Atwood and I sat down at the end of the 2½-day meeting and summarized the most important observations in a session entitled “Five Things to Do Next.”

  1. Because the opportunities today seem to be yielding relatively small dollars, know the size of the market you’re chasing.  It’s easy to put way too much effort into a market segment that might deliver far less revenue than the expenses required to cover it. Our research shows that the total local mobile advertising expenditure for 2011 will be in the neighborhood of $788 million, and the majority of local markets are seeing less than a half-million dollars each. That will grow 103% next year, but it’s always best to get realistic first about the underlying dollars that support your mobile efforts.  Note:  to see my opening statement with our 2012 local advertising forecast, which includes this data, click here.
  2. Take a very close look at mobile marketing’s geofencing capabilities.  We believe that this may hold the biggest promise for local media companies.  The presentation by Placecast CEO Alistair Goodman highlighted case studies showing businesses that sent text messages to people within the vicinity of their store, getting 73% of them to actually come in and 65% of them to purchase something.  Even more interesting was the fact that 49% of those who responded to the opt-in text by coming into the store hadn’t planned on coming in.  That’s extremely powerful, and hints of an entirely new method of “push” marketing based on consumers’ proximity to a store location.
  3. Participate in mobile ad networks like those offered by AT&T Interactive, xAd, Where.com, Verve and others.  With mobile inventory growing exponentially, local sales forces may not be able to keep pace.  So it makes perfect sense to link into the mobile networks, which are reporting significantly higher CPMs than traditional online ad networks.
  4. Invest in training, especially with sales forces.  Our surveys indicate that 48% of smaller local advertisers surveyed intend on participating in mobile marketing this year.  That’s very high.  Sales reps should be tuned into this interest and adequately trained to answer their questions.  In addition, the consultative sales approach — or “agency approach” — to selling is going to be vital.  We heard four local advertisers tell us during the conference that the “best” sales rep they ever encountered was trustworthy, honest, and helpful.  Not pushy, persistent and persuasive.
  5. Don’t forget that mobile devices are rapidly becoming video-centric.  We heard stories about pre-roll inventory on TV websites being sold out, and being sold at CPMs north of $70. With the rapid transition of video viewing over to mobile devices, there is likely to be a great deal of opportunity for 10-second pre-roll and post-roll on video programming.   The CPMs alone should be enough to commit a fair amount of resources to building out video programming.
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